Time Series Forecasting Guide Released
Valeriy M. shared a video walkthrough of his time series forecasting book Chapter 1, offering practical insights for market prediction and economic analysis. Dr. Alex Burns recommended Ed Thorp's "A Man for All Markets" and Kelly Criterion books for positive expectancy in trading. GoldSeek.com analyzed the 2026 monetary/fiscal backdrop, warning of inflation effects on the economy.
- Valeriy Manokhin's book, "Mastering Modern Time Series Forecasting," argues that models are only 5% of the forecasting problem, with the other 95% comprising practical knowledge like metrics, validation, and deployment. - Edward O. Thorp, author of "A Man for All Markets," is a mathematician considered the "father of quantitative finance" who first proved his card-counting methods on an IBM 704 computer before applying statistical analysis to financial markets. - Thorp's first hedge fund, Princeton Newport Partners, reportedly ran from 1969 to 1988 without a single losing quarter, achieving an average annual return of 19% after fees. - The Kelly Criterion is a mathematical formula used to determine the optimal position size for a trade by calculating the fraction of capital to bet based on the trade's probability of success and its win-to-loss ratio. - While many forecasters expect inflation to continue its decline, some analysts project it could surpass 4% by the end of 2026, citing the delayed effects of tariffs and an expanding fiscal deficit as key drivers. - Fiscal policy in the U.S. may significantly influence 2026 inflation, with potential tax breaks back-dated to January 1, 2025, possibly creating a surge in consumer spending due to large income tax refunds in early 2026. - Federal Reserve participants in early 2026 noted that while housing services price inflation had decelerated, core goods price inflation had increased, which was largely attributed to the effects of higher tariffs.
